ON APPEAL FROM THE EIGHTEENTH JUDICIAL DISTRICT COURT. NUMBER 70287-F, DIVISION A, PARISH OF POINT COUPEE, STATE OF LOUISIANA. HONORABLE JAMES J. BEST, JUDGE.
Richard J. Ward, Jr., District Attorney, Elizabeth A. Engolio, Assistant District Attorney, Plaquemine, Louisiana, Counsel for Appellant, State of Louisiana.
Karl J. Koch, Mary Olive Pierson, Baton Rouge, Louisiana, Counsel for Defendant-Appellee, Martin G. Lemoine.
BEFORE: PETTIGREW, WELCH, AND CHUTZ, JJ. WELCH J. dissents and assigns reasons.
[2014 1158 La.App. 1 Cir. 2]
On January 20, 2004, a grand jury returned an indictment charging Morel G. Lemoine Distributors, Inc., Martin G. Lemoine, and Veronica Lemoine with conspiracy to commit money laundering (count 1), violations of La. R.S. 14:26 and 14:230; money laundering (count 2), a violation of La. R.S. 14:230; and racketeering (count 3), a violation of La. R.S. 15:1351, et seq. The defendants pled not guilty to the charges. The indictment charged that the offenses occurred between March 15, 1995 and March 6, 1998. The defendants moved to quash the indictment on the grounds that the charges were not brought within the legal delays allowed under Louisiana law. After a hearing, the trial court granted the motion to quash in part, based on the time limitations. The racketeering charges were dismissed because they had a five-year statute of limitations; and the portion of the money laundering (and conspiracy) charges that alleged offenses occurring more than six years prior to the indictment were also dismissed. Accordingly, the charged period against the defendants was reduced to a forty-six-day time period, from January 20, 1998 through March 6, 1998. The trial court found that the State had not alleged sufficient facts to support a violation of the money laundering statute, but gave the State an opportunity to amend the bill of particulars. The State filed an amended bill, which indicated that payments were made by checks deposited into the operating account of Morel G. Lemoine Distributors, Inc. (Morel). The trial court denied the motion to quash the money laundering charges, finding that the State's amended bill alleged a violation of some sections of the money laundering statute.
The defendants took writs with this court, arguing that the money laundering charges should have been quashed because there was no evidence to show how much money was received by the defendants as a result of the alleged inflating of invoices during the charged time period. The defendants contended that because of [2014 1158 La.App. 1 Cir. 3] the graduated nature of the penalties for money laundering, the State was required to allege a specific amount. On August 23, 2005, this court denied the writ in part and granted the writ in part; regarding the money laundering crimes, we found that the State's allegations, if proven true, constituted the crimes charged according to the language of La. R.S. 14:230 and La. R.S. 14:26. We remanded the matter with instructions that the trial court reopen the evidentiary hearing, allowing the State an opportunity to prove whether the amount of funds obtained by the defendants as a result of inflating invoices, after January 20, 1998,
totaled $20,000.00 or more in order to demonstrate that the six-year time limitation of La. C.Cr.P. art. 572A(1) was applicable. With regard to the defendant, Veronica Lemoine, we granted the writ application, finding that the bill of particulars and amended bill of particulars did not clearly allege her activities subsequent to the initial criminal act of inflating invoices to the Union Pacific Railroad Company. The matter was remanded with instructions that the trial court allow the State an opportunity to amend the bill of particulars in order to clarify whether Veronica Lemoine engaged in any activity that would constitute money laundering. See State v. Morel G. Lemoine Distributors, Inc., 2005-0734 (La.App. 1st Cir. 8/23/05) (unpublished writ). The defendants sought supervisory review with the Louisiana Supreme Court, which was denied. See State v. Morel G. Lemoine Distributors, Inc., 2005-2457 (La. 9/15/06), 936 So.2d 1254.
On January 22, 2007, the trial court held a hearing on the remand from this court and ruled that the State met its burden and, as such, it was not necessary to consider evidence submitted by the defense. The defendants filed supervisory writs with this court, arguing that the trial court erred in considering only the State's evidence. On May 29, 2007, we granted the writ application and remanded with instructions for the trial court to reopen the hearing on the motion to quash to allow the State the opportunity to prove, pursuant to La. C.Cr.P. art. 577, whether [2014 1158 La.App. 1 Cir. 4] the amount of funds obtained by the defendants as a result of inflating invoices to the railroad company, after January 20, 1998, totaled $20,000.00 or more in order to demonstrate that the six-year time limitation of Article 572(A)(1) is applicable. See State v. Morel G. Lemoine Distributors, Inc., 2007-0768 (La.App. 1st Cir. 5/29/07) (unpublished writ).
Based on the foregoing, the trial court conducted a motion to quash hearing on August 13, 2008. At this same hearing, the defendants raised a separate motion to quash based on our recent decision (at that time) in State v. Odom, 2007-0516 (La.App. 1st Cir. 7/31/08), 993 So.2d 663 (per curiam). The trial court denied the motion to quash based on Odom. Regarding the motion to quash claim based on time limitations, the trial court denied the motion. In its written reasons issued on November 20, 2008, the trial court stated that based upon the evidence at the motion to quash hearing, it was more probable than not that the prosecution should not be barred by prescription. The trial court found the State proved to its satisfaction that the $20,000.00 statutory threshold was met. The trial court further stated that any shortcomings in the State's case should be determined by the trier of fact at a trial on the merits. The defendants sought supervisory review with the supreme court, which was denied. See State v. Morel G. Lemoine Distributors, Inc., 2009-0179 (La. 11/20/09), 25 So.3d 789.
On November 17, 2010, the defendants filed a motion to quash counts 1 and 2 (the money laundering counts) for duplicity. At a hearing on January 5, 2011, the trial court granted the motion, finding that each transaction would be considered a count of money laundering, requiring each count to
be set out in the [2014 1158 La.App. 1 Cir. 5] indictment. The State sought writs. Granting the writ, we found the trial court erred in ordering the State to sever each occurrence of money laundering into particular counts. We noted the indictment was not duplicitous as the occurrences were part of a common scheme or plan. See State v. Morel G. Lemoine Distributors, Inc., 2011-0890 (La.App. 1st Cir. 9/26/11) (unpublished writ). The defendants sought review with the Louisiana Supreme Court, which was denied. See State v. Lemoine, 2011-2383 (La. 2/3/12), 79 So.3d 328.
Trial began on August 26, 2013. Prior to voir dire, the trial court granted the motion to quash regarding Veronica Lemoine as a defendant, and she was dismissed. The State also dismissed the charges against Morel G. Lemoine Distributors, Inc. Finally, the parties made clear that the only charge against the sole defendant, Martin G. Lemoine, was one count of money laundering, pursuant to La. R.S. 14:230(B)(2). Following the jury trial, the defendant was found guilty as charged. The defendant filed a motion for postverdict judgment of acquittal. Following a hearing on the matter, the trial court took the matter under advisement. Subsequently, the trial court granted the motion for postverdict judgment of acquittal " for reasons stated in the Defendant's memoranda in support thereof and adopted by this Court as its own." The State now appeals, designating one assignment of error. We affirm the trial court's ruling reversing the defendant's conviction.
The defendant was president of Morel, a New Roads company that supplied diesel fuel to Union Pacific Railroad (U.P.) at the rail yard in Livonia, Point Coupee Parish. In the mid-1990s, from about 1995 to 1997, several drivers drove bobtail fuel trucks for Morel with carrying capacities of up to 5,000 gallons of fuel. Morel's drivers most often traveled to Valero Refining Company in Krotz Springs, and occasionally to Placid Refining Company in Port Allen, to fill their trucks up [2014 1158 La.App. 1 Cir. 6] with high-sulfur diesel fuel. These refineries converted crude oil into petroleum products, including diesel, ethanol, gasoline, liquid petroleum gas, jet fuel, and fuel oils. After a driver filled his truck up, he was issued a fuel manifest from the refinery. The manifest contained pertinent information on it such as the date, the name of the refinery, the name of the driver, and how many gallons of fuel were pumped into a truck. From the refinery, Morel's drivers drove to the U.P. rail yard and transferred the fuel in the trucks directly into the locomotives, as opposed to directly to the storage fuel tanks at the yard. This refueling of the locomotives was continuous and around the clock and, as such, generated many fuel manifests. When a Morel driver finished fueling a locomotive, he handwrote the engine number and the number of gallons he transferred to the engine on the bottom of the fuel manifest he had received from the refinery. A single manifest could contain anywhere from a few engine numbers up to ten or so engine numbers and the corresponding numbers of gallons of fuel transferred to each engine. At the end of a day or shift, each driver gave his stack of manifests to Morel's lead driver, who from 1995 to 1997, was Keith Glaser. Glaser transferred the handwritten information on the fuel manifests to a field ticket. A single field ticket could contain a half-dozen or more engine numbers and the corresponding gallons of fuel pumped into each engine. Glaser handwrote the field ticket number onto its corresponding fuel manifest so that Morel could keep track of when, where, and how much it was fueling. Rex Averill, who worked in Morel's office as a truck dispatcher, also generated the
invoices based on the numbers on the field tickets. Invoices referenced the fuel manifests by number and contained the amount of fuel transferred into a U.P. locomotive on a particular date. Invoices also included the unit price of a gallon of fuel, usually around $.50 per gallon. The Morel invoice multiplied the unit price by the number of gallons to determine the total amount (minus the sales tax) it would charge U.P. for the diesel fuel. Averill sent these [2014 1158 La.App. 1 Cir. 7] invoices to U.P. U.P. paid Morel with company checks, which were deposited into Morel's business checking account.
Averill testified at trial that during Glaser's time at Morel in the mid-1990s, Glaser inflated the amounts of diesel fuel on the field tickets. Glaser did not testify at trial. Averill knew Glaser was doing this, and he (Averill) would transfer these inflated numbers to the invoices that were sent to U.P. Accordingly, U.P. was getting overbilled or overcharged for the amount of fuel it was actually receiving in its locomotives. For example, a June 29, 1996 Valero fuel manifest (Valero was Basis Petroleum, Inc. at that time) listed in handwritten form the fourth U.P. engine as No. 2251, and the number of gallons of diesel fuel pumped into that engine as 1,630. On the invoice, however, the quantity of diesel fuel that is indicated as having been pumped into U.P. engine No. 2251 is 2,051 gallons.
Stephen Paddy, a U.P. Special Agent, testified at trial about the alleged fraudulent billing scheme from 1995 to 1997. Agent Paddy presented many examples of gallons of fuel being inflated on Morel's invoices and testified that the inflation was often by 200 to 300 gallons. The fuel manifests from 1995 to 1997 that were introduced into evidence all contained scratched out fuel amounts; that is, after the U.P. engine number and the amount of fuel pumped into that engine were handwritten on the bottom of the manifest, the fuel amounts were subsequently scratched out with an ink pen in an apparent attempt to hide the actual amount of fuel transferred into an engine. If there was no number of gallons of diesel fuel on the manifest, then there was no number to compare the inflated number to that was on Morel's invoices to U.P. It appears that when Glaser was fired from Morel in late 1997, he threatened the defendant with telling U.P. about the billing scheme. Shortly thereafter, Veronica Lemoine, the defendant's wife, and Averill began scratching out the fuel gallon amounts on the manifests. According to Averill, Veronica did the vast majority of the scratching out.
[2014 1158 La.App. 1 Cir. 8] All of the fuel manifests that contained scratch-outs and their corresponding invoices and field tickets were from the years 1995 through 1997. The fuel manifests in 1998 (and onward) did not have any scratch-outs on them. The charged time period of money laundering, as alleged in the indictment, was from January 20, 1998 to March 6, 1998. According to Agent Paddy, the defendant's billing scheme stopped by March 6, 1998 because, by this time, U.P. at the Livonia rail yard had gone " on line" ; that is, U.P. obtained its own fueling facility. Agent Paddy testified that since U.P. had its own tanks in the yard and, further, since everything was metered, padding invoices was impossible.
Averill also testified that by the beginning of 1998, there were no more scratch-outs on the fuel manifests because there were too many " checks and balances." The fuel was metered at four different checkpoints, according to Averill. He maintained, however, that the fuel inflation still continued in 1998. According to Averill, beginning in 1998, the drivers no longer handwrote the engine numbers and gallons on the fuel manifests. As such, there
was nothing to scratch out. Also, Morel no longer used field tickets. Averill testified that instead of recording the number of gallons of fuel on the manifests, they were written on any piece of paper - a shop towel or toilet paper. Averill used these numbers to make the invoices, then threw away the pieces of paper. Averill stated that he personally inflated the numbers on the invoices and sent them to U.P. for payment. Averill was fired from Morel in early 2002, and in 2003, he went to work for U.P., and told U.P. about Morel's alleged fraudulent billing scheme. Averill testified that he paid Glaser to pad the invoices at the behest of the defendant, which occurred prior to the charged time period (1995 to 1997). During the charged time period of forty-six days in early 1998, after Glaser had already been fired, Averill testified he continued the inflation of the invoices, but he was not paid anything extra by the defendant to maintain the scheme.
[2014 1158 La.App. 1 Cir. 9] Christopher Peters, who qualified as an expert in forensic accounting, testified for the State. A certified fraud examiner, Peters was asked to analyze the documentation associated with the forty-six-day charged time period. Since there were no field tickets during this time period, Peters linked the invoices to the fuel manifests by date. Peters added the total number of gallons of fuel on all the invoices from a single day and compared that amount to the total number of gallons on the manifests from that same day. For example, Peters added up all the gallons of fuel on the manifests dated January 20, 1998, which totaled 40,668 gallons. There were four separate invoices dated January 20, 1998, with different amounts of gallons of fuel on each invoice corresponding to the manifests. The total amount of fuel on these four invoices was 43,096 gallons. According to Peters, this meant that Morel charged U.P. for more gallons, or 2,428 gallons, than it had actually pumped into its trucks at the refineries and then delivered to U.P. On some days, Morel charged U.P. for less gallons than it (Morel) had actually purchased from the refineries. For example, on January 21, 1998, the total amount of fuel purchased from the refineries by Morel was 39,854 gallons. The total amount of fuel sold to U.P. on that same day, January 21, 1998, was 27,732 gallons. An analysis of the daily differences, or the variances on each day, did not necessarily indicate any scheme or pattern because, on seventeen days of the forty-six days at issue, Morel charged U.P. for less fuel than it purchased. In other words, on these seventeen days, Morel was giving U.P. a credit. Peters explained that Morel's crediting back some of the money that it had taken within the overall framework of stealing money from U.P. was Morel's way of hiding what it was actually doing. It was part of the sophistication of the scheme, according to Peters. Thus, according to Peters, the important number in his analysis was the cumulative difference, or the total variance over all forty-six days, between the number of gallons of fuel on all the fuel manifests and the number of gallons of fuel on all the [2014 1158 La.App. 1 Cir. 10] corresponding invoices that Morel sent to U.P. for payment. Peters testified that of the around two million gallons of diesel fuel that was sold over the forty-six-day period, U.P. was overcharged (or overbilled) for 111,000 gallons of fuel, which amounted to about $55,000.00.
ASSIGNMENT OF ERROR
In its sole assignment of error, the State argues the trial court erred in granting the defendant's motion for postverdict judgment of acquittal. Specifically, the State contends the trial court substituted its opinion for the jury's unanimous verdict
wherein there was no reasonable doubt of the defendant's guilt.
A conviction based on insufficient evidence cannot stand as it violates Due Process. See U.S. Const, amend. XIV; La. Const, art. I, § 2. The standard of review for the sufficiency of the evidence to uphold a conviction is whether, viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979). See also State v. Ordodi, 2006-0207 (La. 11/29/06), 946 So.2d 654, 660; State v. Mussall, 523 So.2d 1305, 1308-09 (La. 1988). The Jackson standard of review, incorporated in Article 821, is an objective standard for testing the overall evidence, both direct and circumstantial, for reasonable doubt. When analyzing circumstantial evidence, La. R.S. 15:438 provides that the fact finder must be satisfied the overall evidence excludes every reasonable hypothesis of innocence. State v. Patorno, 2001-2585 (La.App. 1st Cir. 6/21/02), 822 So.2d 141, 144.
The defendant filed a motion for postverdict judgment of acquittal with incorporated memorandum of law. In his memorandum, the defendant challenges the sufficiency of the evidence raising three separate issues:
[2014 1158 La.App. 1 Cir. 11] (1) The State failed to offer proof sufficient to reasonably support a guilty verdict of the offense allegedly underlying the money laundering charge - the State failed to prove he sent any invoice during the charged time period which billed the railroad for more fuel than it received.
(2) The State failed to offer any evidence whatsoever to attempt to prove that he acted for the purpose of committing or furthering the commission of any criminal activity as required by La. R.S. 14:230(B)(2).
(3) He is entitled to a postverdict judgment of acquittal as to any grade of the offense beyond the misdemeanor defined in La. R.S. 14:230(E) because the evidence clearly shows that the " value of the funds" was less than $3,000 since the " things of value" in the case were checks, while " funds" is defined in the statute as cash.
We agree with the defendant regarding the second issue. The evidence as a matter of law was insufficient to convict because the State failed to prove every element of the offense. Specifically, the State failed to prove the defendant knowingly acted in a way for the purpose of committing or furthering the commission of any criminal activity. Because the foregoing analysis disposes of the sufficiency issue in its entirety, we do not address the other arguments raised by the defendant.
In 1998, La. R.S. 14:230 provided in pertinent part:
A. As used in this Section:
(1) " Criminal activity" means any offense, including conspiracy and attempt to commit the offense, that is classified as a felony under the laws of this state or the United States or that is punishable by confinement for more than one year under the laws of another state.
(2) " Funds" means any of the following:
(a) Coin or paper money of the United States or any other country that is designated as legal tender and that circulates and is customarily used and accepted as a medium of exchange in the country of issue.
(b) United States silver certificates, United States Treasury notes, and Federal Reseive System notes.
[2014 1158 La.App. 1 Cir. 12] (c) Official foreign bank notes that are customarily used and accepted as a medium of exchange in a foreign country and foreign bank drafts.
(3) " Peace officer" has the same meaning as in R.S. 40:2402(1)(a).
(4) " Proceeds" means funds acquired or derived directly or indirectly from or produced or realized through an act.
B. It is unlawful for any person knowingly to do any of the following:
(1) Conduct, supervise, or facilitate a financial transaction involving proceeds known to be derived from criminal activity, when the transaction is designed in whole or in part to conceal or disguise the nature, location, source, ownership, or the control of proceeds known to be derived from such ...